Embraer: Partnership with Boeing not to include defense and executive aviation

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Sao Paulo - The negotiations with Boeing doesn't include the company's defense and executive aviation sectors, Embraer said on April 12 at the Securities and Exchange Commission (CVM)

This statement was made due to the Bovespa's (Brazilian Stock Market) inquiry about the recent progress on the negotiations between the two companies.

Embraer and Boeing Co., together with the working group, are still analyzing possibilities for the feasibility of a combination of their businesses, which may include the creation of other companies with joint participation in the commercial aviation area, leaving the defense and executive aviation parts separate,

said Brazilian manufacturer in its statement.

Embraer's statement says little about the current state of the negotiations. This week Defense Minister Joaquim Silva e Luna said he was open to negotiating a partnership involving the KC-390 program of the Brazilian aircraft manufacturer, emphasizing that the partnership should be based on the win-win principle.

Negotiators are getting closer to an agreement, I would say, in short, this will end in marriage,

Joaquim Silva e Luna said in an interview on April 10 at a security trade show in Sao Paulo.

Defense minister's latest comments mark a change of tone at the defense ministry, which has been cautious about a partnership with Boeing because of Embraer's role as a leading Brazilian innovator and a critical supplier of military aircraft.

On the commercial side, a joint initiative with Boeing would provide both manufacturers an industry shift that began in October last year when Airbus agreed with Bombardier to take control of the CSeries program, a direct competitor to the Embraer's new generation E2 jets that are entering into service this year.

The defense and executive aviation sectors are among the most profitable at Embraer. In recent years, the company has been a leader in its operations, dominating much of the executive jet
market, formerly led by Cessna and Bombardier, through new, modern, cheap and efficient aircraft.